Brazil’s alarmingly slow planting pace raises flags for second corn crop

RIO DE JANEIRO, BRAZIL – Yield risks arise whenever Brazil’s heavily exported second corn crop is planted late, but this year the delays are the worst in a decade, and the pressure for favorable weather through the next several months is substantially higher than usual.

Historically dry conditions in Brazil last year led to a slow soybean planting pace. Late soybean sowing alone does not always mean the corn crop will be planted just as late, but rains have hampered the bean harvest, worsening the delays for the second corn sowing that immediately follows.

However, Brazil’s official statistics body, Conab, remains upbeat on the harvest prospects. The agency on Thursday increased the country’s total corn crop to 108.1 million tons from the previous forecast of 105.5 million.

That included a jump of 2.7 million tons for the second corn crop, which is still being planted, to 82.8 million tons on both area and yield increases. Conab also lifted Brazil’s soy harvest by 1% to a record 135.1 million tons.

But the world’s No. 2 corn exporter still has many hurdles to clear to reach a bumper corn harvest. Consultancy AgRural estimated second corn planting as of a week ago at 54% versus 80% a year ago.

SUPPLY SHORTAGES

Brazil’s government is already concerned about tight domestic supplies over the next year. On Wednesday, the Agriculture Ministry noted that measures will be introduced, possibly in May, to boost next year’s summer crop.

That first corn crop is the one that supplies local needs, and it used to represent the bulk of Brazil’s output. But now it accounts for less than a quarter as global corn demand has grown, and Brazil’s export capabilities have increased. Currency weakness has encouraged even more planting of the country’s second crop since it is attractive for Brazilian farmers to sell on the global export market.

The expected harvest delays push the availability of the second crop even later, causing more concern for domestic supplies by mid-year.

Conab on Thursday pegged Brazil’s 2020-21 first corn crop at 23.5 million tons, down slightly from the prior outlook. That is also notably down from the initial October outlook of 26.8 million tons and last year’s 25.7 million. Yields have fallen 14% since the October estimate.

Conab’s 82.8 million-ton second crop forecast is up 8% since the initial outlook, primarily on an expected increase of plantings. That compares with last year’s harvest of 75.1 million tonnes.

Source: Reuters